Iraq Can Move Arab States to New Economic Focus

The 23rd Arab League Summit is now
under way in Baghdad. Unlike the 22 non-emergency summits that
preceded it, this one will be worth watching, and for two
reasons.

First, to the surprise of many, the Arab League has become
an organization of consequence. In the wake of revolutions
across the region, the league has commanded something of a
leadership role. In Libya, it was instrumental in ushering in
and legitimizing foreign intervention against Muammar Qaddafi’s
regime. And on Syria, through its proposals for monitors and
peacekeeping forces, the league has been the most active
international organization seeking to end the violence Bashar al-Assad has unleashed on his citizens.

The other reason for paying special attention to this
summit has to do with its host, Iraq. The last Arab League
Summit held in Baghdad was in 1990, just months before Saddam Hussein invaded Kuwait. Since then, Iraq has effectively been
out of the Arab fold -- on account of war, sanctions, occupation
and sectarian strife. This week’s event marks a major milestone
for Iraq and is the most tangible sign of its potential re-
emergence as a regional player.

The meeting offers the Baghdad government its first real
opportunity to demonstrate how it intends to orient itself as a
regional actor. Iraq has understandably been consumed by
internal challenges over the past nine years. This inward focus
has led to a foreign policy focused on alleviating Iraq’s debt
burden, getting out from under United Nations Chapter VII
sanctions, gathering support for the fight against terrorism and
extremism, and urging greater acceptance of the new Iraq.

A Regional Role

Thus far, Iraq has generally avoided the task of
articulating its position on key regional issues or its
aspirations as a regional power. This failure to stake out such
a role is mostly the result of major disagreements among Iraq’s
political elites about how they see their nation in relation to
its neighbors. Some of Iraq’s leaders see Iran as the country’s
greatest threat to sovereignty, while others see the meddling of
Arab nations in Iraqi domestic affairs as the most detrimental.

The Arab League Summit will give observers more insight
into what sort of role Iraq will seek in the months and years
ahead. Several paths are possible:

-- One scenario is that Iraq fully re-integrates itself
into the Arab world, assuming traditional Arab stances toward
regional issues such as Palestinian statehood, Israel, and
Iran’s nuclear program, and that Iraq will give key shared
institutions such as the Organization of Petroleum Exporting
Countries priority over national interests.

-- Another possibility is that Iraq reclaims its regional
prominence, but does so more on an independent and progressive
basis. Iraq might work with nearby states on a common security
framework, help shape the shared response to a nuclear Iran, be
sympathetic to (if not an advocate for) political reforms among
its neighbors, and promote more pragmatic and flexible solutions
to other regional issues.

-- Or Iraq might choose to develop itself as an unaligned
state, seeking to isolate itself from regional quagmires and
focusing on the promotion of national interests. Iraqis often
talk about their oil policy as indistinguishable from their
foreign policy. If this is the case, one might interpret the
results of Iraq’s “bid rounds” for contracts with foreign
companies as an indication that Iraq’s international priorities
are to reintegrate itself into the global market and to build
relationships broadly, without giving the U.S. or regional
countries any pride of place within Iraq.

-- Finally, and most distressingly, Iraq could be absorbed
partially or fully into Iran’s sphere of influence. In this
scenario, Iraq might have some leeway in domestic matters, but
internationally it will support Iran, especially in the face of
a confrontation over Iran’s nuclear program. Over time, economic
and physical infrastructure will integrate the two countries,
while links between their security apparatuses grow stronger.

Domestic Political Factors

So, which of these futures is most likely? Several factors
will come into play. The most important pertain to domestic
politics. As we have already seen, the current government of
Prime Minister Nouri al-Maliki, which is dominated by Shiites,
has led to Iraq’s cool treatment by most Sunni Arab states.
Ironically, this frostiness has had the effect of pushing Iraq
even closer to Iran.

Iraq’s geopolitical situation, and its need to export large
amounts of oil through terrain that others control or have huge
sway over, will be another factor. Iraq cannot afford
(literally or figuratively) to agitate all its neighbors
simultaneously.

Iraq’s relationship with the U.S. will, of course, also be
influential in determining its trajectory. The withdrawal of all
U.S. forces from Iraq at the end of 2011 made the scenario where
Iraq is a regional power, but one with considerable independence
from traditional Arab views, much more unlikely. Without the
U.S. comfortably and visibly in its court, Iraq may have a
tougher time confronting the established views of its Arab
neighbors.

The final two scenarios -- Iraq as an unaligned state, or
solidly in the sphere of Iranian influence -- are much more
plausible now that American troops have departed.

The inevitable focus on Syria right now will make it
difficult for Iraq to use the summit to demonstrate its
intention to fully re-integrate into the Arab world. Unlike most
other Arab states, Iraq has been distinctly reluctant to
pressure Assad to step aside. While it is saddening to see Iraq
-- a country whose people know the wrath of ruthless dictators
better than any other in the region -- shy away from condemning
Assad, the Maliki government has sectarian sympathies for the
Syrian government, whose Allawite character is very close to
Shiism. Moreover, Iraq is nervous about what sort of government
would follow Assad, and the real possibility that it will be led
by the Muslim Brotherhood, a conservative Sunni group.

Developing Resources

Despite these understandable concerns, Iraq’s Arab
neighbors will see any effort by the Iraqi government during the
summit to skirt the Syrian issue as proof of what they have long
suspected: Iraq is the lackey of Iran.

Iraq will be unable to escape a focus on Syria this week.
But it can still use the event to set the tone for the next
year, during which it will assume the chairmanship of the Arab
League. In doing so, Iraq would be wise to introduce a new focus
to Arab League deliberations: prospects for economic
diversification and for regional economic cooperation. These
issues have received the short end of the stick in such
meetings, which traditionally have centered on political issues.

Yet, in the wake of the Arab revolutions, regional leaders
are more likely than ever to equate economic prosperity with
their own political survival, whether they are part of the new
wave or of the old guard. This should lead to new thinking.

For example, many efforts to industrialize and create new
jobs will require natural gas for electricity. Yet, the region’s
significant gas resources remain largely undeveloped. Politics
has hindered what should be obvious commercial connections.
Instead of importing gas literally from the other side of the
Iraqi border, Kuwait imports gas through the Dolphin pipeline
from more distant Qatar. Saudi Arabia burns huge quantities of
oil it could export, instead of using its own gas resources or
importing from neighbors.

A focus on economic diversity and cooperation would not
only address real needs in the region, it could also make clear
that Iraq is at the heart of a potential solution. Having large
amounts of undeveloped oil and gas resources, a strategic
location and a significant internal market, Iraq has the
potential to use its energy wealth to help integrate the region.

By bringing these economic issues to the fore in the next
few days, Iraq can begin to carve for itself a critical, if more
independent, role in the Arab world and win the respect -- and
perhaps ultimately even gratitude -- of its neighbors.

(Meghan L. O’Sullivan, a professor at Harvard University’s
Kennedy School of Government and former deputy national security
adviser in the George W. Bush administration, is a Bloomberg
View columnist. The opinions expressed are her own.)